We investigate the causal impact of a generous unconditional cash transfer at birth on children's health and academic performance. Using rich administrative data, we take advantage of the unexpected introduction of a ?baby bonus? in Spain in 2007 and implement a difference-in-discontinuity approach comparing children born in the surrounding months in different years. We find little impact on children?s health and test scores. We also fail to find meaningful changes in household structure, maternal employment, parental time, or child-related monetary investments. Our results contribute to understanding which interventions are effective at fostering children?s health and human capital formation.

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24 February 2026

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Journal of Labor Economics 44(2) 2026

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DOI: 10.1086/733052

https://www.journals.uchicago.edu/doi/10.1086/733052

This Journal article is published under the centre's Education programme.